Your specific arrangement is detailed in your retainer agreement with Segal, or described in other communications between you and Segal. If you would like a copy of your most recent retainer or other agreement with us, please call your Segal representative. A list of our offices appears below. Alternatively, please call Allyson Daniels at (212) 251-5367, and she will handle your request.

In any case in which a client requests assistance with the purchase of an annuity, the work is performed by Segal Advisors, Inc. (dba Segal Marco Advisors). For information regarding compensation paid to Segal Marco Advisors, see the disclosure.

Gifts, gratuities, and non-monetary compensation

From time to time, third-party vendors may provide Segal (and its affiliates) with non-monetary gifts and gratuities, such as promotional items (i.e., coffee mugs, calendars, or gift baskets), and access to certain industry related conferences and meals associated with those conferences (collectively, “gifts”). Segal has implemented policies and procedures intended to identify, quantify, and track gifts received by it and its affiliates. Pursuant to rules established by the Department of Labor, Segal has implemented a policy for allocating the value of a gift among multiple clients, where applicable. Under such policy, where potentially reportable compensation is received by Segal (including its affiliates) in connection with several clients, Segal will first divide the fair market value of such gift by the number of individual clients to which such gift is reasonably applicable and then allocate the result to each affected client to determine if it exceeds the de minimis threshold under the Section 408(b)(2) regulation and related and associated guidance. Based on historic trends, Segal does not expect to receive gifts in excess of the de minimis threshold under the regulations with respect to your Account.

Compensation for Termination of Your Account

We do not receive a termination fee or apply a penalty when your agreement with Segal is terminated.

Segal Consulting (“Segal”) provides life and health benefits consulting services on behalf of our group clients to assist them with the design, management and service of employee benefit programs. Our basic services include:

Innovative Plan Design Strategy and Analysis

Budgeting/Financials

Claim and Eligibility Audits

Cost Modeling

Data Mining and Benchmarking

Wellness/Individual Health Management

Total Health Management

Health Plan Compliance

Network Analysis

Prescription Drug Benefits

Vendor Competitive Bidding and Renewal Negotiations

Funding Arrangements

Employee Contribution

Employee Communications and Plan Enrollment

Retiree Health and Retiree Health VEBAs

While the above-mentioned services will typically be charged on a fee-for-service basis*, there are three areas that may result in additional compensation, in the form of commissions:

The placement of Life, Accident and Health benefits for which we accept commissions, where insurers will not remove them from premiums or where required by public procurement rules

The placement of medical stop loss coverage for which we provide the option to conduct competitive bids and services on a commission basis

Revenue sharing fees for project management services related to Segal’s arrangement with third party technical sub-contractors

Voluntary Benefits design and placements.

* Presently, fee for service business accounts for over 96% of total Segal revenue.

Scope of Practice

The Segal Health Practice provides life and health benefits consulting services to collectively bargained multiemployer plan sponsors, public sector plan sponsors, and employers that provide health and welfare benefits to their workers and eligible dependents. We work with plan sponsors to provide them with health services related to benefit plan design, purchasing and negotiating, cost management, data mining and analysis and communications.

How We Are Paid

The Segal Health Practice’s primary method of compensation for our services, including the placement of insurance coverage, is on a fee-for-service basis. Where we take standard commissions, we must have a written agreement setting forth the compensation arrangement. In addition, our policy is to fully disclose to our clients the amount and basis for the standard commissions. Finally, we will not return (“rebate”) any commissions, excess or otherwise, to any client.

Commission or Fee Income

Commissions are paid on a formula that is set by each insurance company and filed with the state insurance regulators. Generally, standard commissions are set as a percent of the premiums paid for the insurance policy. In some cases, commissions set by insurers are a fixed, per member per month amount. The range of commissions can vary based upon a number of factors, such as the type of insurance, number and type of product lines sold, and volume. Standard commission formulas paid by insurance carriers to Segal Consulting are pre-set, meaning they will not be increased because of binding coverage with a particular insurer.

In addition to standard commissions, we may accept life and health insurance carrier supplemental payments. Supplemental payments formulas are also pre-set by each insurer and the formula is not increased or altered because of binding coverage with a particular insurer. Supplemental payments can be linked to new sales volume or persistency of policies in force with the carrier based on the book of business results for Segal. Segal will accept supplemental payments to be used to finance national investment in research, technology, databases and client education, in order to improve client support services or to offset consulting fees where applicable.

We disclose to each client, in writing, the amount of standard commissions we received during the prior year for that client. Often, supplemental payments are derived from book of business results and not from individual client premiums. In these cases, Segal does not report client specific accounting of supplemental payments.

Indirect Compensation

It is important to note that what we report to clients is the sum total of compensation that the Segal Company receives from a carrier based on individual client premiums. Although, as noted above, we will accept supplemental payments, we:

DO NOT accept compensation or reimbursement from any carrier for any marketing expenses.

DO NOT accept free entertainment, such as golf or sports tickets, or expenses associated with a carrier-sponsored conference. Segal Health Practice’s staff may periodically participate in carrier sponsored educational seminars, industry events and/or underwriting meetings, but will generally reimburse the carrier for expenses that exceed a specific de minimis dollar threshold.

No Influence on Decision Making

The way our staff analyzes insurance proposals or makes recommendations regarding types and levels of coverage is objective and is free from any influence by commissions or supplemental payments. Objective analysis and neutrality are core values at Segal Consulting, and the insurance industry recognizes it. We base our recommendations solely on client requirements and objectives.

Related Party Transactions

Segal does not directly or indirectly own any insurance carrier used to provide insurance coverage to any Segal Health Practice client. Neither the Segal Health Practice nor Segal operates as a managing general agency, managing general underwriter, or wholesaler.

Any questions concerning commissions on life and health benefits consulting services, including requests for precise commission amounts and information about any alternative quotes obtained, should be directed to Edward Kaplan, the National Health Practice’s Senior Vice President and National Practice Leader, at 212-251-5212 or ekaplan@segalco.com.